Aflac Incorporated (AFL) just declared $0.45 quarterly dividend increase. This is an increase of 4.7% from $0.43.
I own 25 shares, so this will increase my annual dividend income by $2.00.
AbbVie Inc. (ABBV) also announced a dividend increase. However, ABBV increased it by a whopping 10.9%. They declare a $0.71 quarterly dividend. Before the increase, it was $0.64.
I own 52 shares of ABBV. This will increase my annual dividend income by $14.56.
I updated both my Passive Income page as well as my Portfolio page to reflect the changes.
My Thoughts:
Let’s talk about AFL first. The dividend increase has been in-line in recent history. AFL has been increasing it by 2 cents every four quarters. This is great and concerning. The great thing about these increases is that it is higher than the rate of inflation. My concern is, if AFL continues to raise its dividend by two cents every year, then the dividend raise percentage will continue to decrease and might be lower then inflation.
The current dividend payout ratio is only 25%, so AFL does plenty of room to grow it a little bit more. Hopefully, they start to do that.
I find the shares to overvalued when I compare it to the last 10 years. I would consider AFL in the low $60 a share. I recommend a HOLD at this level.
Now let’s talk about ABBV. I am really happy how ABBV has been performing and the dividend increase that they declared. They have a dividend payout ratio of 59% and analysts expect that earnings will grow at a mid-teens level, so I see ABBV will continue to grow its dividend at a double-digit rate. I am up almost 50% and I see ABBV continuing to go up.
The only issue I see is that the stock is fair to overvalued. I would like for shares to be in the low $80. For now, I would recommend a HOLD.
Own any of the companies mentioned above? How do you feel about the dividend increase?
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Hi Felix :
You have some shares of OHI In your portfolio.
Do you think OHI still a BUY now ?
OHI’s yield is around 9% now !
Hi Paul,
Absolutely I think OHI is a buy. I am actually planning to buy more. Thanks for the question Paul.
Thanks Felix!
I just started my GE position 1,000 shares @20.14 (After hours , Scottrade)
Firstrade’s commission is only $2.95
Just2Trade’s commission is only $2.5
InteractiveBrokers commission is only $1 (200 shares)
I have an InteractiveBrokers account opened last April.
I am not sure about GE right now. I am waiting for their dividend announcement. That will tell me if I buy more or sell.
Hi Paul,
I’m new to your site. I own shares of ABBV and I’m glad to see the increase. I know you recommend a hold on ABBV, but, at least for me, I follow the dollar cost averaging strategy where I invest the same amount into the stock regardless of the price, so that, over time, I get the average price of the stock. Out of curiosity, how do you tell if a stock is overvalued or undervalued? Looking forward to stopping by more often.
DP, my name is Felix, but thanks for visiting and welcome to my site. Thats a great way of buying shares of a company.
Here are a few examples on how I value a company:
https://seekingalpha.com/article/4111614-recent-buy-t-inc
and
https://seekingalpha.com/article/4100419-recent-buy-qualcomm-inc
Those are two article I wrote for seeking alpha. Let ne know if you have any questions. Hope to speak to you soon.
Hi Felix,
Thanks for the update on AFL. My annual dividend has been increased by about $5. Not too much but that basically pays for two extra free coffees each year (I only get the cheaper black coffees).
As far as buying OHI now, will you be doing that in an IRA? I’m a little leery of purchasing REITs in a taxable account.
Scott
Hi Scott,
I won’t be buying OHI at this time because it is one of my largest positions. If it was not, I would be buying more shares. I would be buy in my taxable account because I plan to retire early and would need access to that dividend they send out.
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